INTERNATIONAL MARKETING STRATEGY

MODULE 2
GLOBAL MARKETING INFORMATION SYSTEM

Dr. Jerry John

Assistant Professor
KCM
DEFINITION AND MEANING OF
GLOBAL MARKETING INFORMATION
SYSTEM
• MIS is the structure of people, equipment and procedures used to
gather, analyse and distribute information needed by an organisation.
• Global MIS is an organised collection of telecommunication
equipment, computer hardware and software data and personal
design to capture, store, update, manipulate, analyse and display
information worldwide.
• Global MIS makes possible improved communication and control,
better coordination of operations and integration of operations on a
global scale.
NEED FOR GLOBAL MARKETING
SYSTEM
• Anticipation of consumer demand - mass production and mass distribution are based on anticipation of
consumer demand.
• Complexity of marketing – modern marketing is complex. expanding markets require adequate market
intelligence services.
• Significance of economic indicators – marketers must have latest information on the changing trends of
supply, demand and prices. They serve as a basis for analysing trends of prices and economic conditions.
• Significance of analysing competition – a marketer cannot make decisions without analysing competition
and without up to date market information, especially nature, character and size of competition to be met.
• Development in technology – growing markets create conditions that leads to technical progress.
Marketers must have latest information regarding technological developments.
• Understanding the consumer – communication gap between the consumers and marketers is responsible
for unrealistic marketing plans and programmes.
• Marketing planning – they are based upon the information supplied by economic forecasts and marketing
research that provides information about future economic and marketing conditions.
FRAMEWORK OF GLOBAL
MARKETING INFORMATION SYSTEM
• Internal marketing information
• Most basic information system used by marketing managers.
• Also called internal records system.
• Include detailed reports on orders, sales, prices, inventory levels, receivables.
• Marketing intelligence system
• Systematic collection and analysis of publicly available information about competitors and developments
in the marketing environment.
• It is a set of procedures and sources used by the managers to obtain everyday information about
relevant documents in marketing environment.
• Sources such as census data, market news, newspapers etc.
• Marketing research
• Systematic design, collection, analysis and reporting of data.
• Wider concept than marketing research.
• Its only a part of MIS.
FRAMEWORK OF GLOBAL
MARKETING INFORMATION SYSTEM
(contd…)
• Analysing and processing of information/marketing models
• Time series sales model
• An arrangement of statistical data in accordance with time of occurrence is called a time series.
• Different time series models are additive model, multiplicative model, mixed model .
• Brand switching models
• It is the consumer’s decision to purchase a product of a brand different from that previously
purchased.
• The model is when consumers switches their allegiance from one brand of a certain type of
product to another.
• Linear Programming
• Analysis of problems in which a linear function of a number of variables is to be optimised.
• It is a mathematical device for determining the optimal solution of resources and obtaining a
particular objective.
FRAMEWORK OF GLOBAL
MARKETING INFORMATION SYSTEM
(contd…)
•Elasticity models
• Price elasticity
• Expresses the response of quantity demanded of goods, to a change in its price given the consumers income, his tastes and
prices of goods.
• income elasticity
• It’s the percentage change in the quantity demanded of a good divided by percentage change in the income of the consumer.
• Demand elasticity
• It is the percentage change in quantity demanded divided by the percentage in one of the variables on which demand
depends.
• Supply elasticity
• It is defined as a measure of the degree of responsiveness of supply to the change in price.
• Regression and correlation models
• Dependent variable – is the single variable being explained/predicted by the model.
• Independent variable – is the explanatory variables used to predict the dependent variable.
• Correlation is the study of the linear relationship between two variables.
FRAMEWORK OF GLOBAL
MARKETING INFORMATION SYSTEM
(contd…)
• ANOVA models
• Full formed as analysis of variance.
• Useful in fields of economics biology, education,sociology,business etc.
• is used when multiple sample cases are involved.
• Considered to be an important tool of analysis.
• Sensitivity analysis
• It assess the impact of a change in the input data or parameters on the proposed solution.
• It allows flexibility and adaptation to changing conditions.
• Spreadsheet what –if model
• Structured as what will happen to the solution if an input variable, an assumption.
• It is easy for managers to ask a computer model questions and get immediate answers.
INTERNATIONAL MARKETING
RESEARCH
• Introduction
• It is research that evaluates consumer, export and import statistics in other parts of
the world.
• It reflects the way in which spending patterns differ across the globe.
• Related to a region’s culture, customs and socioeconomic influences.
• Marketing research is defined as the objective and formal process of systematically
obtaining and interpreting data in marketing.
• It is a systematic and objective study of problems related to marketing.
• According to Philip Kotler it is the systematic design, collection, analysis and
reporting data relevant to a specific marketing situation facing an organisation.
• It is critical to companies that are planning to export their goods to other
countries.
SCOPE OF INTERNATIONAL
MARKETING RESEARCH
• Research of industry, market characteristics and market trends
• Research is often conducted in the form of acquisition, diversification and market share analysis.
• Export research is another type of research in this category.
• Buyer behaviour research
• Examining brand preferences and brand attitudes.
• Other studies are consumer segmentation studies conducted to identify profiles of heavy product consumers.
• Product research
• Concept developments and testing studies are performed in developed countries by development departments.
• Brand name generation and testing is also done in international companies.
• Distribution research
• Special attention is given to import/export regulations and practices.
• Also in companies well advised .
• Promotion research
by doing the research, the firm evaluates the extent to which it effectively communicates with markets.
it also evaluates the extent to which the local media are appropriate for the intended message.
Pricing research
It is much more problematic than when it is performed locally in a developed country.
It comprised of international market potential, sales potential , sales forecasts, cost analysis, profit analysis, price elasticity studies.
PROCESS OF INTERNATIONAL
MARKETING RESEARCH
• Identifying and defining the research problem- once identified, it becomes easy to reach a
consensus on the objective of the research.
• Exploratory research – it can provide the relevant dimension of the actual problem and also suggests tools
required to solve the problem.
• Descriptive research – needed to describe a situation and get the hypothesis proposed by exploratory
research. It includes observational and statistical techniques in detailing the problem situation.
• Causative research – it is undertaken to establish the cause and effect relationship between independent and
dependent variables.
• Developing and formulating a research plan – it will identify the budgetary provisions,
requirements, information sources and their cost to the organisation in terms of preparing data,
reaching those data to protagonists, survey methods, analysis methods etc.
• Determining information about extent and need - it helps to know how much information would
suffice to reach some conclusive evidence to solve the problem. Researcher devises a concious
strategy that can ensure self reference criteria will not be allowed to colour the research process.
PROCESS OF INTERNATIONAL
MARKETING RESEARCH (contd…)
• Collecting, analysing and interpreting data –
• there are two types of date – primary and secondary data.
• Primary data which are collected for the first time through interviews and secondary data which
already exists like newspapers, journals etc.
• It’s the final stage of marketing as the teams have understood the requirements and necessary
inter-culture adjustments of a research project.
• Finalisation of report and presentation – researcher comes to the conclusion creating
the final research project.
• Implementation
• Prepare marketing research plan.
• Train the research staff.
• Prepare operating schedule.
• Evaluate and modify research system.
ROLE OF INTERNATIONAL
MARKETING RESEARCH
• Market potential – refers to various markets having the highest potential in terms of demand.
• Consumer information – informations such as education, sex, age, habits, tradition, buying months and
behaviour.
• Environmental information – market conditions such as major competitors, their strengths and weakness, their
products and attributes.
• Marketing information – promotional budgets, payment terms and prices quoted are mainly screened.
• Product information – whether product is suitable for export if manufactured and entering the market for the
first time.
• Actualisation of export potential – companies should decide its strategies to be followed in entering the market.
• Review of export market – its necessary not only for a company trying to venture for first time bur also for an
established firm to carry out market research.
• Change in market conditions – losing market share in one country, general down trend in introduction of a new
and better product etc.
• To improve its position in export market – by promotion channel of distribution, strategies market policies.
ANALYSING GLOBAL OPPORTUNITIES
• Introduction
• A global market opportunity is a favourable combination of circumstances,
locations or timing .
• It offers prospects for exporting, investing, sourcing or partnering in foreign
markets.
• It enhances company performances.
• Initial stage of planning in international marketing is to identify global
marketing opportunities.
BASIS FOR CLASSIFYING TARGET
COUNTRIES
• Classification based on stages of demand
• Existing markets : consumer needs are known and already being serviced by some products. Market
opportunities can be assessed by estimating the consumption rate and share of imports in current
consumption.
• Latent markets : have potential customers, but because no one has offered a product to fill the latent
need there is no existing market.
• Incipient markets : do not exist in the present. But conditions and trends can be identified for
products and services that will create a latent market.
• Classification based on stages of development
• Industrially developed economies : provide a large market as they have no import restrictions. They
provide marketing for the following products
• Electronics and light engineering goods.
• Spares and components and raw materials.
• Decorative articles.
• Anti-pollution articles.
BASIS FOR CLASSIFYING TARGET
COUNTRIES (contd…)
• More developed developing countries : they would update technology for current range of
manufactures. They will import machinery and equipment to set up new manufacturing facilities.
• Raw material exporting economies : they are generally faced with large changes in foreign
exchange earnings because of fluctuations in export prices.
• Subsistence economies : found in least developed countries. They require
• Equipments to exploit their untapped resources.
• Infrastructural facilities like railways, roads, power generation equipments etc.
• Turnkey projects like housing, schooling, hospitals etc
• Classification Based on division of world markets
• Basis of population
• Age groups and sex
• Social class
• Educational background
• No. of households
• Geographic differences
BASIS FOR CLASSIFYING TARGET
COUNTRIES (contd…)
• Basis of gross national products – it provides a basis for classification of
countries. Considers the following points
• Sufficient datas are available about the segment in question. If not available it is not
worthy to adopt such strategy.
• Segment selected must be such that it can yield adequate returns.
• Segment selected must be accessible in an effective manner.
SCREENING INTERNATIONAL MARKET
OPPORTUNITIES
• Step 1: determine international marketing objectives
• Various markets have different degrees of attractiveness from the point of view of objectives.
• The objectives determine what an organisation should achieve .
• Step 2: country identification
• It is undertaken on a general overview of potential new markets.
• Need required as anyone can choose any country to go into.
• Step 3: preliminary screening
• Is concerned with identification ad elimination of countries with unsuitable trading climates.
• Purpose is to reduce the number of countries to receive greater attention by way of more detailed analyses.
• Step 4: in –depth screening/detailed investigation and short listing
• Specify to the industry the organisation opertaing in is gathered, analysed and evaluated .
• Determining present and future demand, product potential, local distribution ad production are parts of this
stage.
SCREENING INTERNATIONAL MARKET
OPPORTUNITIES(contd…)
• Step 5: Final selection
• Koch proposes three types of limitations in the final selection:
• Company objectives
• Strategies
• Resources
• Final scoring, ranking and weighing are based on more focused criteria.
• Step 6: direct experience
• Marketing managers travel to a particular nation to experience the nation’s culture
and business.
• On a first impression they ascertain in what ways nation is similar or dissimilar to
one’s own domestic market.
CRITERIA FOR SELECTING TARGET
COUNTRIES
• Internal factors
• Personnel – it determines how the organisation will complete globally.
• Management – their experience and knowledge will reduce fear of international trading.
• Customers – they influence the market in which an organisation will select to compete
in.
• Capital requirements- clear capital requirements helps management to determine the
market they select.
• Social assessment – organisation should treat the same as tangible determinant and
include it in the cost benefit analysis.
• Corporate social responsibility – it incorporates the environment and pollution
restrictions imposed by each government.
• Time and research – decision on which the country to select for international trading will
be affected by the element of time allotted for the decision.
CRITERIA FOR SELECTING TARGET
COUNTRIES
(contd…)
• External factors
• Market size and growth – requires an assessment as to what share of the total market in the country the firm can reasonably
expect to obtain foreign competition and affordability of the product.
• Competitive structure – number of competitors in the market, relative size distribution of market shares can measure level of
competition.
• Entry barriers – they are present to protect domestic industry or to ensure that companies entering from foreign markets
conform to trade relation’s arrangements with other countries.
• Political environment – an examination of target country’s political orientation and environment is part of the preliminary
screening stage of market selection.
• Legal environment - it is important due to the devastating impacts that court of law decisions may have on a company’s
globalisation attempts.
• Economic environment – the stage of an economic growth within a country affects numerous facets of firms international
strategies.
• Culture – is integral to the marketing concept, based on satisfaction of wants and needs of potential buyers. Markets are
selected because they are seen as ‘psycologically close’ to domestic market.
• Infrastructure – issues considered here includes the extent and nature of export market’s physical distribution infrastructure.
• Currency stability – more stable the currency, more attractive the market will be. Exchange rates plays an important role in
economics, affecting the balance of trade between nations and influencing the investment.
SEGMENTING/GROUPING
INTERNATIONAL MARKETS
• Concept is based on the fact that markets of commodities are not
homogeneous but are heterogeneous.
• It respects a logical outgrowth of marketing concept.
• It is defined as process of indentifying groups or sets of potential customers at
either the national or sub national level.
• In international markets the advantage of segmentation is less compared to
domestic markets due to the difference in economic and political
environments, cultures etc.
• Policy of segmentation helps to alleviate problems arising from
misconceptions, since it requires explicit consideration of magnitude and
relevance of differences and similarities between foreign countries.
BASIS FOR INTERNATIONAL MARKET
SEGMENTATION
• General country characteristics
• Geographic location – countries in close geographic proximity have similar cultural patterns
and climatic conditions.
• Demographic or population characteristics – such as age structure provides a basis for
segmentation also the number and relative importance of different racial groups affects the
cultural diversity.
• Level of socio-economic development – it tends to be associated with degree of
industrialisation of the country. It affects the size of market for a particular product as well as
type and quality of products bought.
• Cultural characteristics – attitude towards social institutions are features of cultural patterns.
Different cultures are also characterised by differing degrees of receptivity towards change.
• Political factors – it may influence the buyer motivations, role and position of decision-maker
and the constraints affecting the buying decisions..
BASIS FOR INTERNATIONAL MARKET
SEGMENTATION (contd…)
• Situation specific country characteristics
• economic and legal constraints - play an important role in influencing demand for specific products.
Government economic policies may affect the climate of demand for certain types of products through
directing resources towards production of certain commodities.
• Market conditions
• Degree of competition – it will affect response by customers to alternative marketing strategies as well as their
perception of the price.
• Business attitudes – affects the type of marketing strategy pursued by organisational buyers who are likely to engage in
a higher degree of search.
• Stage of product lifecycle – a product in an early stage of its life cycle, consumers may need to be convinced of the
desirability or need of the product ant to be made aware of potential uses.
• State of technology – depends on the availability of certain skills to handle and to maintain them.
• Nature of intermediate market organisation – thr role of marketing intermediaries becomes crucial, since they may be in
an important power position in the channel. Selling the intermediate marketing organisation may be more crucial than
selling the final customer.
• Product – bound culture and lifestyle characteristics - they affect attitudes towards specific products.
Cultural values associated with material possessions may affect which product reflect status.
FACTORS INFLUENCING
INTERNATIONAL MARKET
SEGMENTATION
• Size, objectives and resources of the company – it will dictate to a great extent how it segments
its market. Resources of company also determine extent of segmentation as company having
moderate resources has limited segmentation.
• Type of product and market – some companies have a simple product portfolio that lends to
easy segmentation.
• Competitive structure of industry – the more competitive the market the more each
organisation will look toward differentiating their product so as to gain competitive advantage.
• Nature and culture of international market – segmentation strategies differ according to market
such as segmentation strategies differ in competitive market from non-competitive market.
• International product life cycle stage – it decides whether the product launch is going to be
sustained in international market or not.
• Competitive strategy of firm – organisations that choose to segment the customers and focus
on target markets are more successful in highly competitive environments.
ANALYSING INTERNATIONAL BUYERS
• CONSUMER MARKETS
• Ability of people to buy- is affected by the amount of wealth a country
possess and the distribution of its wealth.
• Consumer needs – Money is spent to fulfill basic human needs
• Abraham Maslow’s hierarchy of needs explain that humans tends to satisfy lower level
needs, such as psychological needs for food, clothing and shelter before attempting to
satisfy higher level needs such as safety, belonginess etc…
• Buying Motives – buyer behavior is not uniform among all humans. As a
marketer moves from culture to culture, he or she will see that buyer
behavior differs.